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CBH calls out Nyrstar

Tuesday, 13th April, 2010

* CBH is reviewing its operations. * CBH is reviewing its operations.

Despite calling on Nyrstar to make its takeover intentions clear, CBH Resources has begun an internal review at the Belgiangiant's request. Lead and zinc miner CBH was subject to a takeover bid by Nyrstar that was worth around $290 million but was thwarted after Japan's Toho Zinc refused to sell all of its CBH convertible notes.

Toho, which owns 24.1 per cent of CBH, instead pitched a rival proposal to increase its stake in CBH to 49.4 per cent. That deal would also see Toho grab a 50 per cent stake in Rasp. CBH's independent directors backed the move by Toho, with a shareholders' meeting due to be held on April 28.

CBH managing director Stephen Dennis yesterday said his company still backed Toho's plans despite a statement from Nyrstar late on Friday offering a "possible" alternate proposal."Until they (Nyrstar) come out from behind the bushes and put something which is real on the table we have got no intention of moving the meeting which is scheduled to take place on April 28,"

Mr Dennis told AAP."Until something absolute, real and genuine materialises on the table, we have no reason to make any changes at the present point."If Nyrstar come forward with something firm between now and then, well obviously the independent committee will consider its position at that point." In its statement on Friday Nyrstar said it would drop its previous requirement to acquire all of CBH's convertible notes.

Nyrstar would pay CBH shareholders 19.5 cents per share, or scrip in Nyrstar at an exchange ratio that would deliver equivalent value. But the proposal is hinged on an internal review, requested by Nyrstar and now underway, which will see operational, technical, commercial, financial, tax and legal matters confirmed in a due diligence report. It is expected to take seven business days to complete. At Endeavour, this will include a review of the current performance versus budget, assessing the condition of the concentrator and assessing the freight agreements.

At Rasp, it will mean Nyrstar getting access to the mine's development plan, critically assessing the mining methodology and reviewing mining reserves, resource estimates and grades. Mr Dennis said Nyrstar's earlier bid relied on the implementation of a scheme of arrangement which would have required the support of Toho. Under the latest proposal Nyrstar could potentially acquire CBH without Toho's support.

In a tug-of-war for CBH, Nyrstar said its new "possible" proposal addressed concerns which led CBH to place the Toho offer ahead of the previous Nyrstar offer. In a letter to CBH, Nyrstar said it believed the offer was superior for shareholders and noteholders to the revised Toho deal.

"Specifically, we believe that an offer to acquire all of CBH's ordinary shares (with a minimum 50.1 per cent minimum acceptance), combined with an offer to acquire all of CBH convertible notes with no minimum acceptance condition would address the concerns raised by the committee," it said. CBH ended the day up 5.56 per cent to $0.19 with more than 7.87 million shares traded. BDT/AAP

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